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Another Decline for Architecture Billings Index

Wednesday, January 22, 2014

Another
Decline for Architecture Billings Index

Continued
strong demand for multi-family residential projects

Des Moines, IA– January 22, 2014 – Following
consistently increasing demand for design services throughout most of 2013, the
Architecture Billings Index (ABI) has posted its first consecutive months of
contraction since May and June of 2012. As a leading economic indicator
of construction activity, the ABI reflects the approximate nine to twelve month
lead time between architecture billings and construction spending. The
American Institute of Architects (AIA) reported the December ABI score was
48.5, down from a mark of 49.8 in November. This score reflects a
decrease in design services (any score above 50 indicates an increase in
billings).The new projects inquiry index was 59.2, up from the reading of
57.8 the previous month.

"Unfortunately we have seen a
decline in December’s billings index. The Midwest, specifically, dropped from
51.6 in November to 47 in December,” said Executive Director of AIA Iowa,
Jessica Reinert, CAE, IOM. "Last month we believed that the dip was isolated
but it appears the effects of the federal government shutdown are still behind
the decrease in design services. We are optimistic that with the first quarter
of the new year underway and the new projects inquiry index trending upward, we
will see a positive increase in design services in 2014.”

The regional and sector categories
are calculated as a 3-month moving average, whereas the index and inquiries are
monthly numbers.

About the AIA Architecture Billings
IndexThe Architecture Billings Index (ABI), produced
by the AIA Economics & Market Research Group,
is a leading economic indicator that provides an approximately nine to twelve
month glimpse into the future of nonresidential construction spending activity.
The diffusion indexes contained in the full report are derived from a monthly
"Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms.
Participants are asked whether their billings increased, decreased, or stayed
the same in the month that just ended as compared to the prior month, and the
results are then compiled into the ABI. These monthly results are also
seasonally adjusted to allow for comparison to prior months. The monthly ABI
index scores are centered around 50, with scores above 50 indicating an
aggregate increase in billings, and scores below 50 indicating a decline. The
regional and sector data are formulated using a three-month moving average.
More information on the ABI and the analysis of its relationship to construction
activity can be found in the White Paper Architecture Billings as a Leading
Indicatorof Construction: Analysis of the Relationship Between a Billings
Index and Construction Spending on
the AIA web site.

About The American Institute of
Architects
Founded in 1857, members of the American Institute of Architects consistently
work to create more valuable, healthy, secure, and sustainable buildings,
neighborhoods, and communities. Through nearly 300 state and local chapters,
the AIA advocates for public policies that promote economic vitality and public
well being. Members adhere to a code of ethics and conduct to ensure the
highest professional standards. The AIA provides members with tools and
resources to assist them in their careers and business as well as engaging
civic and government leaders, and the public to find solutions to pressing
issues facing our communities, institutions, nation and world. Visit www.aia.org.